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Success story: Kenai LNG plant’s nearly flawless 30 years Phillips/Marathon’s Nikiski facility sets standards for safety and continuous operation while supplying gas to Tokyo utilities Jim Prevost PNA Historical Events Writer
On Oct. 8, 1998, Phillips Petroleum Co. and Marathon Oil Co. made history by sending their 1,000th shipment of liquefied natural gas from their Kenai LNG plant to Japan. That is one of several milestones achieved recently by the facility, which began production in June 1969.
“This has been an exceptional operation for 30 years,” said Larry Porter, the superintendent of administration, laboratory and shipping at the plant. For Porter, this anniversary has personal significance, because he and Mike Shane, a shift supervisor, are the two remaining employees who have been with the operation from the beginning.
Superior safety record In addition to operating around the clock for 30 years, the Kenai LNG plant has achieved the continuous-service milestone without a single serious injury due to accident.
“There’s been nothing of any consequence,” Porter said. “We went a million man-hours totally accident free — it took us 13 years to get that. Then, a couple years ago, a guy took a long step and ripped a muscle. It was officially an accident, but it could have happened anywhere.”
LNG history Development of commercial quantities of LNG began in 1964, when Great Britain began importing the liquid from Algeria.
Earlier, Phillips, Marathon and other companies had discovered vast reserves of natural gas in the Cook Inlet area, following Richfield’s oil strike at Swanson River. With little local demand for the gas, the companies began looking for international markets. They found Tokyo Gas Co. and the Tokyo Electric Power Co., who desired to switch from coal to cleaner LNG as a means of supplying growing energy needs while helping to reduce Japan’s serious air pollution.
Phillips and Marathon signed a sales agreement with the two utilities in 1967, and embarked on a coordinated international effort to get the gas out of the ground and to a processing facility, and then transport the product to the buyers.
The $200 million plan called for several design and construction projects:
• A gas liquefaction plant with its own deep-water docking and loading facility;
• The two largest LNG tanker ships yet built, each capable of carrying 450,000 barrels of LNG;
• The first LNG receiving and re-gasification facility in Asia, near Tokyo;
• An offshore platform and production facility to be installed in upper Cook Inlet;
• Additional wells in the upper Cook Inlet and Kenai gas fields;
• Underwater, overland and underground pipelines to transport gas from the fields to the liquefaction plant.
The Tyonek production platform, fabricated in Japan and completed on location, began operation in late 1968. While it was being installed, work progressed on the Upper Cook Inlet pipeline, which ran 13 miles under water, then 30 miles south along the shore of Cook Inlet to the LNG plant.
Tokyo Gas built the LNG receiving and re-gasification terminal at Negishi, part of the giant Yokohama port complex, just south of Tokyo.
The two specially designed, 799-foot tankers, Arctic Tokyo and Polar Alaska, were built in Sweden. Polar 10 10 days. The loading process takes about 18 hours, and each ship leaves for the 3,300 nautical mile trip to Japan with 555,000 barrels of LNG.
A good work environment The Kenai LNG plant employs only 41 people, 12 of whom are responsible for operation of the plant. A shift supervisor and two operators run the entire facility, working seven 12-hour shifts and then taking seven days off.
Operations Shift Supervisor Lee Halstead has worked at the plant for 24 years.
“You’ll find that to have seniority around here, you have to have a lot of years,” Halstead said. “People stay here, because it’s a great place to work.”
The supervisor cited the interesting, technical nature of the work, the cleanliness of the facility, the agreeable work schedule and sense of mission as reasons for the facility’s low turnover rate.
The tidy, nearly spotless environment within the 30-year-old facility is truly striking, and is what sets the plant apart from other processing plants within the petroleum industry. LNG is odorless, non-corrosive, and contains virtually no sulfur. Used as fuel within the facility, it produces no particulate matter or other harmful or unsightly pollutants. On its journey through hundreds of miles of pipe, tanks and cooling tubes, it causes virtually no loss of structural integrity from within due to corrosion.
Visitors welcome According to Halstead, the staff is always eager to show off the facility. Organized tours are conducted primarily in winter months, when school classes, scout troops and other youth groups visit. Informational tours are also given to local fire departments and public safety organizations. Because the facility is the pioneering LNG exporter to the Pacific Rim, the occasional group of national and foreign dignitaries will pay a visit.
“We’ve never been shy about giving tours and showing people what’s happening,” Halstead said. “We’re proud of the facility.”
Halstead enjoys helping remove common misconceptions regarding his product.
“People think, ‘Well, is that a bomb sitting there, ready to go off?’ That’s why we like to bring them in. Larry (Porter) does a demonstration where we take some LNG and actually burn it right there in front of people, and show them that, yes, it is a hazardous material, but it can be handled safely, and we have a 30-year record to prove that.”
The future The Phillips/Marathon contract with the two Japanese firms was recently extended to last until March 31, 2009.
Estimates by the U.S. Geological Survey indicate reserves of several trillion cubic feet of recoverable natural gas in Cook Inlet, and the Pacific Rim is seen as an expanding market for the fuel well into the new millennium. These positive supply/demand factors promise a bright future for the LNG trade from Cook Inlet.
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